GE is a consumer finance company. All this popular perception about windmills, toasters, and jet engines is ignorant of the financial reality. I will go on the record and say Buffet is WRONG. GE will perform badly in coming years.
A great indicator that the market is nowhere near bottom is how the peanut gallery continues to pipe up around here that now is the time to buy. The time to buy will be when no webtard would even consider recommending a buy.
Wow that is some ignorance there. How can you possibly have an opinion contrary to Buffet's? The man is clearly the greatest investor of all time, and he's betting $3 billion so you can be sure he did his homework. (He always does).
So what is it you know that he doesn't? Do you think his legions of brilliant employees, who've been doing this sort of thing more successfully than anyone over the past few decades, missed the fact that GE has a large finance division? The same Warren Buffet who has been warning for the last few years that all of the loose credit and complex derivatives based on the loose credit were going to come crashing down?
I'm not meaning to suggest Warren Buffet is infallible, but there are maybe a handful of people in this entire world who know enough to ever firmly have a contrary opinion to one of his on such matters, and they surely don't read this site.
"I will go on the record and say Buffet is WRONG."
You know who says Warren is Buffet is wrong? Poor people :). kingkong, I'm not saying that you are poor, it just sounded like you said Chuck Norris doesn't know how to roundhouse.
Chances are that you and buffet could both be right. Buffet is right in getting a guaranteed 10% return on $3B dollars with a potential for upside with his preferred stock, even if you are right in that GE common stock performs badly in coming years. So long as GE is still in business/profitable, Buffett is right.
I agree with your last point, I'd actually be curious how many of the vocal "buyers" are actually throwing their money down and buying?
Buffett has said that he's looking for huge investments, and he's not as worried about getting great returns. That's the problem with having so much money to invest - he needs multi-billion dollar investments to make a dent, and there just aren't that many around.
He's said that if he only had a million dollars, he could double it every year, with investments in small, relatively unknown companies.
Chances are always that Warren Buffet is right. He's made a career out of being more right than anyone else and for more money than anyone else.
For all but maybe a few people on the planet, to have an opinion that he is wrong is pure conceit. For a layman to say he is wrong is akin to an accountant disagreeing with Stephen Hawking on the topic of black body radiation.
> made a career out of being more right than anyone else
He's made a career out of being good friends with Hank Greenberg and securing capital at lower rates than anyone else at tight times. He also usually takes stakes large enough to force things his way. He is not some sort of successful stock picker; he has a few tricks not available to anyone else.
He's also never operated in a deflationary environment. We shall see how that works out.
Even if GE does poorly, Buffet will still get his dividend. Also bear in mind, dividends paid by most corporations are taxable as long-term capital gains as opposed to income tax.
All in all, a solid bet by Buffet. Perhaps it's time to investigate Berkshire Hathaway stock.
" Perhaps it's time to investigate Berkshire Hathaway stock."
We had a stock picking game when I was in elementary school. I won by picking BerkHa because its price was higher and it moved a lot more. I only had 2 shares but I outperformed everyone who had hundreds or thousands of shares of other stock. I thought it was fun and told my mom we should buy some BerkHa but she said the stock market was gambling.
GE is a consumer finance company. All this popular perception about windmills, toasters, and jet engines is ignorant of the financial reality. I will go on the record and say Buffet is WRONG. GE will perform badly in coming years.
A great indicator that the market is nowhere near bottom is how the peanut gallery continues to pipe up around here that now is the time to buy. The time to buy will be when no webtard would even consider recommending a buy.